RANGE OF USE CASES
In addition to selling a wider range of
items from an ever-expanding universe of
locations, the new generation of vending
machines "offers a variety of use cases,"
says Elizabeth Klingseisen, senior director of
demand generation marketing with IT service
management company CompuCom. Retailers
can use them to efficiently handle items
purchased online for store pickup, protect
high-value items vulnerable to theft, administer
employee supplies and process returns.
"Self-serve automation is the broader trend"
these machines enable, says Kent Savage, CEO
of Apex Supply Chain Technologies. Apex
recently worked with the Cincinnati Reds to
develop an automated concession system at the
team's ballpark; read more about the system at
STORES.org.
One way this is occurring is with buy
online, pick up in store. During the 2017
holiday season, nearly one-third of shoppers
purchased products online and picked them
up at stores, according to the 2017 Retail
Click and Collect Consumer Preference
Study by service and technology firm Bell
and Howell. Respondents' top reasons for
choosing BOPIS were to save on shipping
charges and to get items the same day.
Vending machines can automate what's
often been a manual, time-consuming process.
Rather than stand in a customer service line,
consumers can walk to vending machines
serving as lockers or fulfillment stations and
key in an identification code or scan their
phone to collect their merchandise. "They
enable a more efficient click-and-collect
experience because stores and shoppers alike
can complete their tasks on their own time,"
says Tim Barrett, senior retailing analyst with
Euromonitor International.
Retailers can benefit as well. For starters,
they can promote peripheral items that people
didn't include during their online purchase,
Klingseisen says. "It's a great way to expand
the initial sale," she says. Indeed, 59 percent
of respondents to the Bell and Howell report
said they're likely to pick up additional items
while they're in the store.
Vending technology also can help retailers
safeguard smaller items that are prone to
theft while keeping them quickly accessible
for legitimate customers, says Michael Pitts,
president of vending machine supplier IVM
Inc. The current process often involves
STORES.ORG
hanging a tag on the shelf that the customer
takes to the salesperson, who scans it and
then radios another employee who retrieves
the item. The process takes time and can tie
up several employees.
Intelligent vending systems can streamline
the process. Consumers can scan bar codes
printed on their receipts to open a locker
contained within the machine and retrieve
the items they've purchased. "They don't
have to wait for an employee to get it from
the back," Pitts says.
Similarly, smart vending technology can
play an important role with cigarettes,
alcohol and other products for which
retailers need to maintain a chain of
custody, Klingseisen says. They can
configure the software to efficiently record
everyone who accesses the items.
VENDING FOR SUPPLIES
Another use case involves using
intelligent vending technology to
efficiently help employees requisition
supplies. Rather than initiate a manual
purchase order process, an employee
could swipe their identification badge to
open a locker and retrieve the equipment
they need, Pitts says.
To limit the potential for abuse, the
machine's software can restrict access to
certain groups of employees, as well as
by time, quantity and other parameters,
Pitts says. It also can be programmed
to show which employee badge opened
which locker, and when. When a machine
is used to dispense tools that employees
return at the end of their shift - say,
tablets used by associates on the sales
floor - the software can send alerts items
aren't returned.
By connecting the software to the
supplier's system, the supplier can track
inventory levels in the machine and
automatically refill items once quantities
fall below established thresholds.
Retailers also can deploy intelligent
vending technology to automate returns,
Savage says. Many BOPIS orders already
contain return authorizations; rather
than wait in a line, customers could
initiate a return, head to the store and
place their items in a locker. The store
would receive an alert, letting it know
the item had been returned.
RELIABLE DATA
While intelligent vending solutions show
great promise, achieving their potential
requires accurate, reliable inventory data
and systems, Savage says. That's especially
true when a retailer is using the technology
to fill online orders from a vending machine
at the store.
"The inventory must be accurate, so when
customers come to the locker, it's there,"
he says. Given that many consumers turn
to BOPIS when they're crunched for time,
retailers who fail to deliver the goods they've
promised risk losing customers.
Retailers using machines for BOPIS orders
also will want to identify all information
they need about the transaction and
customer to appropriately serve them. For
instance, a customer who uses a wheelchair
will need to have the product placed within
a machine so they can reach it. To ensure
this happens, the retailer might include
questions during the checkout process
asking if the customer requires a certain
product placement.
Another consideration: Because vending
machines eliminate the ability to try on
items, some consumers may limit purchases
to goods for which fit isn't a factor, or to
repeat purchases of items they've bought
in the past. "However, augmented reality
will soon eliminate these drawbacks,
'up-leveling' the capabilities of vending
machines relevant to apparel and beauty
retailers," Mitchell-Keller says.
As retailers deploying intelligent vending
technology work through these concerns,
many should find they've enhanced the
customer experience. "I think we'll see an
explosion of this type of vending," Pitts
says. He predicts that within the next
decade, just about every consumer will
walk into retail locations to access lockers
or intelligent vending machines for BOPIS
pickups, as well as to purchase other items.
That's in addition to the promise smart
vending holds within back-office operations
such as streamlining the purchasing of
supplies. "The combination of locker and
vending capabilities allows retailers to
become omni-channel and solve various
problems," Klingseisen says.
Karen M. Kroll is a business writer based in
Minnetonka, Minn.
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